September 9, 2008


Price hikes by India's cattle feed farmers deflate government incentive


The Indian government's incentive to offer Indian dairy farmers a concession of Rs 2 per litre is in danger of being deflated by feed manufacturers' decision to raise prices for cattle feed even before the incentive was implemented.


The Karnataka Milk Federation (KMF) has decided to hike the price of cattle feed by Rs 1 per kg. KMF is the third-largest milk-cooperative in India.


KMF chairman H D Revanna defended the group's action, saying that shortage of raw materials used in cattle feed production and the higher prices that resulted have forced the price hike.


Material prices have risen 27 percent while the price hike is only 12.5 percent, he said.


A final decision on the hike in milk prices will be taken at the KMF's annual general body meeting on September 12.


Revanna said they had abided by the government's directive and stalled the hike to avoid confrontation.

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